Shorting or short selling is an investment strategy that involves predicting a drop in the price of a digital asset. Shorting Dogecoin means that you are placing a bet on the price of Dogecoin falling. Shorting the falling prices of Dogecoin is a good strategy if you don’t have enough money to acquire the cryptocurrency and sell it for a profit.
Margin trading is riskier than buying cryptocurrencies, but investors can short or bet against them. Through this method, you can make more profit as the price of Dogecoin decreases. Furthermore, when you trade with leverage, your capital is used to cover the margin based on the extent of your leverage.
Step 1: Open an account Step 2: Go to the Margin tab Step 3: Decide on the amount of Dogecoin and short
Step 1: Create an account Step 2: Purchase futures to short Dogecoin
Don’t use too much leverage when shorting Dogecoin. You can leverage your bet up to 50 times your principal. Using too much leverage involves the risk of you getting liquidated and losing your money.
Ensure you choose an isolated position rather than a cross position. If you short Dogecoin and the coin’s value goes up (which is against your favor), a cross position means you will lose all your money in your future wallet. An isolated position means you will only lose the money you paid for that futures contract
Selling a digital asset you don’t own is shorting. On the other hand, margin trading is when you borrow money from your broker to buy a cryptocurrency. The main difference between both terms is that when you borrow money to have to pay interest on the money you borrowed.
Tip 1: Position size is vital Tip 2: Keep tabs on social media Tip 3: Learn to take profits
If you look at the past performance of Dogecoin, you will know that the cryptocurrency is volatile and has many highs and lows. You can analyze the coin’s price movements through technical and fundamental analysis. Keep yourself updated with the market.